The Small Business Administration’s disaster loan program has run out of funding due to the high demand from constant extreme weather disasters. President Joe Biden called the SBA’s exhausted disaster loan program a critical lifeline for small businesses, homeowners, and renters affected by disasters. The depleted fund may force Congress to address the situation with disaster relief funding when lawmakers return to Capitol Hill in November. Biden mentioned that Speaker Johnson has promised to replenish the fund when Congress returns, encouraging Americans to continue applying for loans. The SBA’s fund is different from FEMA’s disaster relief fund, which currently stands at $8.5 billion.
The SBA will pause new offers for its direct and low-interest long-term loans to disaster survivors until Congress approves more funding for the fund. However, small business owners impacted by recent hurricanes Helene and Milton are encouraged to continue applying for relief. The agency is committed to supporting homeowners, renters, businesses, and nonprofits in processing their applications to ensure quick assistance once the funds are replenished. The fund balance has been decreasing as the agency responds to hurricanes Helene and Milton, with FEMA having sufficient funding to continue response and recovery efforts for those hurricanes.
FEMA received around $20 billion from Congress to respond to hurricane season, spending approximately $11.5 billion of its Disaster Relief Fund in about two weeks. The agency had spent $9 billion before Hurricane Milton made landfall in Florida. A significant portion of the spent money went to reimbursing other states for previous disasters, which FEMA was able to do after no longer being in immediate need of funding on October 1. The rapid spend rate reflects the multitude of disasters that have occurred in the US throughout the summer.
The SBA has received about 37,000 applications for relief from Hurricane Helene survivors and has already made over 700 loan offers totaling roughly $48 million. Additionally, the agency has received more than 12,000 applications from Hurricane Milton survivors. Overall, the demand for disaster relief loans has exceeded the available funding in the SBA’s disaster loan program. With Congress expected to address the situation in November, the administration remains committed to supporting those affected by disasters and ensuring they receive assistance once additional funding is provided.
